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Heller bill would let people losing homes rent with hope of regaining ownership
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STEPHENS WASHINGTON BUREAU
WASHINGTON -- Overshadowed Thursday by the massive mortgage settlement between the states and major banks was the introduction of a Senate bill that could allow people to remain as renters after their homes are foreclosed upon.
The bill by Sen. Dean Heller, R-Nev., allows banks AND Fannie Mae and Freddie Mac to enter leases for up to five years with foreclosed occupants or other renters. After five years, tenants could have an option to buy the home if their fortunes have recovered.
While a small part of the major mortgage mess, Heller said the approach could benefit stressed-out families and keep neighborhoods from disintegrating into ghost towns, as they have in parts of the Las Vegas Valley.
"When families move, their children often have to change schools," Heller said in a speech. "So now not only are children forced to move from their homes, they are also leaving behind their schools and their neighborhoods. This kind of destabilization is harmful for families who are already struggling.
"By providing an opportunity for the homeowner to stay in their home, the bank is giving families a chance to regain sound financial footing."
The Obama administration reportedly is readying a proposal that would turn foreclosures into rentals. The idea has sparked debate among housing experts on whether it would allow massive inventories of troubled properties to be absorbed in an orderly fashion or whether it would prolong the housing slump.
Fannie Mae already operates a "deed for lease" program that allows occupants to rent after transferring their home to the government-backed mortgage company, but the deal is only good for a year. Renters pay market rents that often are lower than their old payments.
In the House, Rep. Gary Miller, R-Calif., has sponsored a companion bill to Heller's. In 2009, a similar Miller bill passed the House by voice vote but was not taken up in the Senate.
Eric Koch, spokesman for Rep. Shelley Berkley, who is running to unseat Heller, called Heller's bill "a political move clearly designed to distract from his disastrous housing policies."
Democrats say those include a vote he cast last year to defund an underutilized Federal Housing Administration loan modification program. While many Democrats voted to keep trying, Heller said the program "is not working for our state."
In 2009, Heller was in a bipartisan group that opposed an element of Obama's recovery plan that would give bankruptcy judges the ability to reduce mortgage principal. They argued it would drive up home ownership costs as banks looked to recover their losses.
Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760. Follow him on Twitter @STetreaultDC.
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elveret.odamit- good comments. Youre right!
There are many websites on Marxist Manifesto,the contents describes how closely our political situation and development resembles it. the class war fare difference is in our country it`s becoming middle class tax payers vs the freeloaders. the rich will not be affected because all the politicians are rich and well to do. politicians will not give up their assets for anyone. so the working tax payers have to carry the whole load more and more. soon the stars on the flags will be red. terrible situation for capitalism and democracy.
Next will be Obummer`s credit card forgiveness plan, let`s charge up everything!!!!splurge!!!! go to Pahrump for some rumps.
More honest tax payer money at work, Heller is the modern day Benedict Aranold to attempting to destroy capitalism honor system. Flakes and Frauds live rent free while you struggle tomeet your obligation. flakes eat stakes at you and your loved ones expense while you eat taco bell if you`re lucky. eventually they`ll get a free house. what a communist country this ha become.
IGNORING REAL VICTIMS. Borrowers who: (1) obtained conservative mortgages (<80% LTV) and (2) stayed current (never defaulted) despite being increasingly upside down due to the Borrowers who defaulted are the ONLY people damaged (lost money), yet are still ignored. REFINANCING? Even with refinancing of debt that exceeds property value, the borrowers who defaulted may still win in the end as they are not upside down! To make matters worse, Government refinancing programs, such as HARP1, is financially HARMFUL to borrowers who must pay upfront FEES (non-refundable) and pay tens of thousands of dollars to resolve any gap btwn existing loan balance and refinance amount. HARP2 removes refinance limit, but the honorable borrower is still upside down (loan > property value)! GOVERNMENT GETTING RICH. In regard to the AG settlements, the States keep most of the shakedown money for themselves. REAL SOLUTION IGNORED. Years ago, Govt programs should have reduced Principal in phases to borrowers who stayed Current (never defaulted) on mortgages obtained from 2004-2007 (high point of boom). That would have avoided most or all defaults and real estate values would have been more stable and thus the economy. ADS. radio ads now offer "credit restoration" to those with foreclosure or short sale on record. So the FICO system has no integrity? TV ads say STOP paying your mortgage if upside down. Those who pay their mortgages are mocked as fools.
Clown Berkley is just like Dirty Harry "BLAME THE OTHER GUY !!" ----- The DemocRATS were in power (even though Bush was the President) when this mess began to unwind. ---- Nice try Shelley, it's a shame most people aren't as stupid as you would like them to be !!! ---- P.S. - Hey Shelley, is your husband still making $$ MILLIONS $$ flipping foreclosures in Nevada ?????
"so why do you think you can tell banks what to do with their property? Stop being a socialist"... Because Banks and their investors are destroying the value of MY property with their reckless lending enterprise for one! Socialism, isn't that what the bailout was? Good Grief.
Wasn't Shelley in Congress when HER govt. started all this crap? But she is too wealthy to really care about anything but getting to pig out at the Senate trough. At least Heller is trying to do SOMETHING that might help.
One of those good in theory ideas that probably won't work. These people weren't paying their house payments for various reasons, what makes anyone think they'll now pay rent. I know of a man who's been in his house three years without paying a single payment, three years! The govrnment needs to butt out of business and let winners and losers shake out by themselves.
Stupid election year idea that will not work. Heller, you got lucky being appointed to the Senate, so remember, you are supposed to be a Republican which means SMALLER GOVERNMENT. Looks like you are just another two faced politician telling people what they want to hear so you win the next election. Sad.